National Logistics Policy – What Industry Leaders are Saying
Given that India’s logistics costs are higher than those of other industrialised nations, there has been a perceived need for a national logistics policy. India must drastically cut its logistics costs if it wants to increase the competitiveness of its exports and domestic products. Reduced logistics costs increase economy-wide efficiency-cutting and promote value addition and enterprise.
Since 2014, the government has placed a high priority on enhancing both the ease of doing business and the ease of living. Another step in this direction is the National Logistics Policy, a comprehensive initiative to address problems of high cost and inefficiency by establishing an overall interdisciplinary, cross-sectoral, and multijurisdictional framework for the growth of the entire logistics ecosystem. The goal of the policy is to promote employment opportunities, boost economic growth, and make Indian goods more competitive.
Prime Minister Narendra Modi launched the National Logistics Policy (NLP) at Vigyan Bhawan in New Delhi on September 17, 2022.
Speaking at the event, the PM described the National Logistics Policy’s introduction as a crucial step toward realising India’s “Pran” of becoming a developed nation. The Prime Minister stated that “coordinated efforts were undertaken to assure speedy last-mile delivery, end transport-related issues, save time and money for the manufacturers, and reduce the wasting of agro-products.” One manifestation of such efforts is today’s National Logistics Policy. The consequent increase in coordination will cause the sector to move at the desired speed. He stated that things are changing quickly in India, which has grown to be the fifth-largest economy in the world. The Prime Minister stated in reference to Cheetah’s release this morning that everyone wants their luggage to move quickly.
The Prime Minister stated, “Make in India and India’s move toward independence are everywhere. India sets ambitious export goals and meets them as well. The idea that India is becoming a hub for manufacturing has become increasingly stable. We shall learn through analysing the PLI plan that it is widely accepted. According to the Prime Minister, the National Logistics Policy would revitalise all industries in such a situation. He asserted that policy is a starting point and that progress is equivalent to policy plus performance. According to him, policy plus performance equals progress when the parameters, roadmap, and timetable for performance are all present. “India of today prepares the ground before introducing any policies; only then can a policy be successfully implemented. The National Logistics Policy was the result of eight years of arduous struggle. There are significant decisions and policy changes, and if I speak for myself, my 22 years of governance experience is the basis for such actions,” he said.
The new logistics policy has four features: Integration of Digital System (IDS); Unified Logistics Interface Platform (ULIP); Ease of Logistics (ELOG); and System Improvement Group (SIG). The IDS integrates 30 distinct systems from seven agencies, including information from the departments of road transportation, railroads, customs, aviation, and commerce. ULIP, or Unified Logistics Interface Platform, would bring all the digital services relating to the transportation sector into a single interface. A new digital platform called Ease of Logistics Services (E-Logs) has been launched to let business associations communicate with the government to resolve problems.
The industry responds and shares opinions and viewpoints on the impact of this policy’s implementation on the industry and economy overall.
Announcement of the National Logistics Policy – A firm step towards ‘Atmanirbhar Bharat’
Shankar Shinde, Chairman, Federation of Freight Forwarders’ Associations in India (FFFAI)
In order to compete and promote our products in the global market, we needed to work together to advance the unorganised logistics industry in India, attaining the government’s goals of single-digit logistics cost alignment with industrialised countries.
We applaud the Hon’ble Prime Minister for announcing the much-needed National Logistics Policy (NLP), which aims to make India one of the most economically viable manufacturing centres in the world by bringing logistics costs down to a single digit.
The NLP emphasised that the current cost of logistics is a result of a number of factors, including the policy framework and limitations on necessary physical and IT infrastructure, and it aptly addressed those bottlenecks to facilitate the nation’s manufacturing and domestic distribution for international trade supported by domestic connectivity.
A holistic strategy has been prioritised, and it would encourage the speed that the nation desires. We as FFFAI are honoured to participate in this project and help the government accomplish its objectives.
The Unified Logistics Interface Platform, Sagarmala, Bharatmala, new waterways, dedicated freight corridors, multimodal logistics parks, Krishi Udan, Faceless Assessment, Turant Customs, SWIFT, GST, PM GatiShakti National Master Plan, LEADS Report, and other initiatives have all supported the NLP to make it more effective in accelerating logistics operations and cargo clearance.
The facilitation of e-LOGS would be more advantageous to interact on the IT platform in real-time for quick responses, forums for dispute resolution, etc.
In the days ahead, we anticipate that the NLP’s four main features—Integration of Digital Systems (IDS); Unified Logistics Interface Platform (ULIP); Ease of Logistics (ELOG) and System Improvement Group (SIG)—will produce the required outcomes for the benefit of the end-to-end logistics sector.
FFFAI also appreciates that the NLP seeks to rank among the top 25 nations in the Logistics Performance Index by 2030 and to develop a data-driven decision support system for a productive logistics ecosystem, in addition to reducing the cost of logistics in India to be comparable to global benchmarks by 2030.
Notably, NLP also has a human face, emphasising the advantages for regular people (as the logistics sector supports the country even during times of crisis like a pandemic or natural disaster) and low-level employees like truck drivers, loaders, and others. These programmes’ main goals were to speed up cargo clearance, make conducting business easier, and raise the nation’s Logistics Performance Index so that it could embrace best practices and compete with international standards for first- and last-mile connectivity.
We anticipate that all ministries, departments, and industry stakeholders will play an effective role in the correct execution of the National Logistics Policy’s innovative initiatives and announcements. As stated in the NLP, FFFAI is dedicated to continuing its efforts to develop logistics operations for the benefit of international trade and the nation’s economy.
The monitoring of performance with advancement is the best aspect of NLP. Only the monitoring system will allow us to accomplish our goals, and we have faith that the government is committed to helping the logistics sector grow and realise its potential.
With NLP, there are several potential ways to organise the logistics business, draw the next generation of young entrepreneurs to it as an industry of choice, and feel proud of working in the logistics sector, which is the engine of the economy.
M. Afzal Malbarwala, President, The Air Cargo Agents Association of India (ACAAI)
The Hon’ble Prime Minister, in his policy launching address to the industry stakeholders, could not have said it any more clearly: The industry wanted a policy framework and the same is being provided by the government. It is now up to the industry to deliver the results by using the policy guidelines and moving forward to take the country’s logistics roadmap to higher levels.
It is my personal belief that this policy will be a game-changer and herald developments we could only aspire to earlier. Affirming support to the industry, the PM even went to the extent of saying to approach the ministry if there is a roadblock, as the government is committed to making this policy work for all associated players. I’m looking forward to it with great optimism.
Xerrxes Master, President, Association of Multimodal Transport Operators of India (AMTOI)
The National Logistics Policy is nothing short of a revolution in the logistics industry.
It’s an extremely bold initiative by the government that will ensure a substantial reduction in logistics costs in India and improve our logistics performance index ranking among the top 25 countries by 2030. In addition, it creates an efficient logistics ecosystem to ensure a resilient supply chain.
A Comprehensive Logistics Action Plan (CLAP) will be used to implement the policy. It will include integrated digital logistics systems, standardisation of physical assets and benchmarking service quality standards, development of logistics human resources and capacity building, state engagement, export-import logistics, a service improvement framework, a sectoral plan for efficient logistics, and facilitation of the development of logistics parks. This well-planned strategy will ensure the required results within the time allotted. Additionally, the NLP offers guidelines on warehousing standards for the first time, resulting in cost savings, increased productivity, and increased global competitiveness. The success of the National Logistics Policy will be greatly dependent on the performance of the warehousing sector. The success of NLP depends on the alignment of all stakeholders around a single digital platform. The Unified Logistics Interface Platform (ULIP), which would put all stakeholders on a single information network and enable real-time data interchange in a secure environment, will ensure India’s sustainability and independence.
India’s growth engine for the next ten years will be logistics, and the National Logistics Policy will guarantee its success.
Yashpal Sharma, President, Air Cargo Forum of India (ACFI)
“It was an absolute honour and pleasure to attend the launch of the National Logistics Policy (NLP) by the Hon’ble Prime Minister. The policy came into being on the occasion of Modi Ji’s 72nd birthday and will definitely aid 22 million logisticians and 1.4 billion people in the country. The PM’s strategy for advancing the logistics industry and the economy, in general, was expressed in words that I found quite encouraging. His excellent reference to the release of Cheetah and Logistics Policy on the very same day was perfectly timed. His aim for the logistics industry to add the speed of a Cheetah to our economy is par excellence. We at ACFI are very excited about the focus of the Government of India on logistics over the last few years, and initiatives like PM Gati Shakti and the National Logistics Policy will surely convert this excitement into action. We will work on key aspects related to air cargo and collaborate with MOCA and other ministries and regulators to achieve the key targets of NLP and PM Gati Shakti.”
Cyrus Katgara, Partner, Jeena & Company and Past President, ACFI
“The National Logistics Policy will accelerate the growth of the sector in the coming years as it aims to promote seamless movements of goods across the country and address the infrastructure and procedural gaps in India’s EXIM connectivity by creating efficient, reliable, and streamlined cross-border trade facilitation. The sectoral plans for cost-effective logistics aligned with the Gati Shakti initiative are poised to be a game changer and we look forward to its unfolding in the near future.”
Rama Krishna S, Managing Director, Balaji Mariline, Past chairman FFFAI
The Honorable Prime Minister, on September 17, 2022, the Prime Minister’s birthday, the National Logistics Policy was introduced. The objective is to reduce logistics costs from 14per cent to around 10per cent. After a thorough examination, the Logistics Department of the Ministry of Commerce determined that the logistics cost is 8.87per cent of the total cost, with administrative and inventory carrying costs accounting for the remainder. The NITI Aayog also carried out a comparable study, and the results were essentially the same.
The key initiatives to lower the cost of logistics include GATI SHAKTHI, Sagar Mala, DFC, new roads throughout India that speed up transit, etc. A key factor in cost reduction as well as keeping product quality is the new warehousing policy, which provides guidance for better management, which will undoubtedly reduce loss and improve handling to encourage retaining packing quality.
This is undoubtedly feasible, especially with the ongoing facilitation measures provided by the Ministry of Finance. Additionally, a soon-to-be-released improved version of Icegate would increase the level of efficiency even more. The trade associations continue to contact the departments since there is still a room for improvement.
My personal opinion is that the majority of importers that receive anything between a 10 to 21-day free period from the shipping lines, as well as a comparable free term from another logistics service provider, incur extremely high costs. If we use the facilitation measure and the industry discipline itself only in the concept of inventory management, the cost of inventory will be significantly reduced. According to the United Nations Conference on Trade and Development, India’s container port throughput was 16,285,806 TEU in December 2020.
On the premise that there is a cost of USD 100 per TEU and we assume the most cautious estimate of 10per cent of the throughput containers where such a cost is incurred, there will be a significant amount of savings predicted if the same can be avoided. The conclusion is that, despite the government’s best efforts, it is up to business to make the most of available possibilities and advance the country’s interests.
C.K. Govil, Vice President, The Air Cargo Agents Association of India (ACAAI)
The Logistics Policy launched by the Respected Prime Minister on his birthday is a great gift to the nation and if done in the true spirit, shall surely be a game changer and one shall see exponential growth all around in “AMRIT KAAL”, making India achieve its goal of being one of the top three economies in the world. The logistics policy has the main role in the growth of the country as it will bolster the growth and be a game changer for the logistics industry as a whole. Hope the logistics policy will result in a huge reduction in cost, time, and carbon emissions, create more jobs, and turn out to be the policy mechanism for unifying the country’s fragmented logistics landscape with technological interventions. Indian manufacturing is at the cusp of entering or competing with the world market and the logistics policy shall give new energy to every sector of the economy; policy and performance shall be equal to progress. The Indian economy is at the takeoff stage and with these reforms and initiatives, the industry needs to join hands with the government to give a big boost to infrastructure development in the logistics industry.
Sushant Nigam, Executive Director, The Air Cargo Agents Association of India (ACAAI)
The NLP 2022 is a beautifully crafted, multi-faceted document that would ensure seamless development of world-class infrastructure and integration with logistics activities; digital exchange of cross-sectoral operational activities related to information among key players; and recording time stamps through advanced technology to monitor each player’s efficiency. The focus would also be on cultivating the raw youth by professionally skilling them through the domain experts for sourcing in the same sector and getting the best quality contribution from such sector-skilled manpower. The entire ecosystem would not only create a huge number of employment opportunities but also boost the national economy phenomenally.
Standardisation of infrastructure and benchmarking of service levels has been the perennial demand of the user trade, which seems to see the light of the day now. Various tools have been made to systematically integrate all logistics services and monitor them too.
The policy would enable the government to achieve its target of reducing logistics costs and data-driven decisions and be amongst the top 25 most efficient countries
Keku Bomi Gazder, Managing Director & Chief Executive Officer, Aviapro Logistics Services
The National Logistics Policy announced by the Hon’ble PM per se has been much appreciated by the community. The policy reminds me of my days at AAICLAS when I was intrinsically involved with the policy work. Apparently, I strongly believe that the Unified Logistics Interface Platform (ULIP) will drive us to move forward in a much more organised and systematic way. In fact, one of the biggest advantages that we shall foresee would be more visibility of the cargo sector that was not in the forefront uptil now. Moreover, with ULIP, the visibility will now be complete and also transparent to all stakeholders. This in itself will be a game-changer for the industry. In relation to the Gati Shakti associated with this project, the logistics industry in total will pave the way for a common area for convergence. The other components associated with this policy shall slowly but seamlessly converge as well and will eventually integrate in due course of time, enhancing its benefits thereof. The policy in hand will no doubt give directions to all the stakeholders, as to which way this will move forward.
Ketan Kulkarni, Chief Commercial Officer, Blue Dart
“The launch of the National Logistics Policy is a landmark move for the sector. The policy consists of essential reforms and initiatives that are expected to have a positive impact on the logistics ecosystem in the country. The National Logistics Policy caters to all the key stakeholders with a special emphasis on streamlining processes for seamless coordination, employment generation and skilling, reduction in overall logistics costs, and ease of business for corporates, farmers, and MSME’s. The policy will help reduce transportation, warehousing, and inventory costs, lowering overall logistics costs to around 8% of GDP over the next five years. Digitalisation of the logistics sector and the creation of unified portals will play a crucial role in bringing the logistics sector together. While ULIP will serve as a single window e-logistics market, ELOG will address the issues of the logistics industry, enhancing the sector. The policy is also expected to boost employment and address manpower issues in the sector with the introduction of new logistics and supply chain courses for students. We are aligned with the vision of the Hon. Prime Minister that packages need to move at the speed of a cheetah; at Blue Dart we move them faster across the nation.”
V. Raju, Sr. Vice President, Contract Logistics & Business Head – Chemical, Food & Pharma, All Cargo Logistics
The National Logistics Policy will make India’s Logistics Sector very cost-competitive, environment-friendly, reduce transit time in transportation, improve the competitiveness of Indian goods in international markets, thus pushing India’s exports to new highs. This aims at making quality logistics infrastructure, thus reducing warehousing costs in addition to reducing inventory holding costs for both importers and exporters. The NLP is formulated with the vision of developing a technologically enabled, integrated, cost-efficient, resilient, sustainable, and trusted logistics ecosystem in the country for accelerated growth. The utilisation of digital technologies and analytics are encouraged and it lays stress on using a unified Logistics Interface Platform to match supply and demand processes. “Hopefully, this will become a landmark policy as far as the country is concerned,” he concluded.
Dr. Pramod Sant, Former Vice President, Head of Import Export and Customs, Siemens
India’s ranking in the 2018 Logistics Performance Index (LPI) of the World Bank fell from 35 to 44. The logistics industry in India faces numerous difficulties, including high costs (13–14per cent), fragmentation, and a lack of organisation in the majority of cases. In addition, the regulatory environment is complicated because it is subject to several regulations and is governed by a large number of parties.
Since the Modi government took office in 2014, it has made deliberate attempts to enhance logistics through programmes like Sagarmala, UDAN, infrastructure development, and PM Gati Shakti in October 2021. The next natural step in providing a holistic plan to enhance the whole logistics ecosystem is the NLP, which Prime Minister Modi unveiled on September 17th.
NLP will assist in achieving a number of goals, including lowering logistics costs in India by 5per cent of GDP, raising the country’s LPI ranking, building integrated institutional mechanisms, seamlessly integrating various modes of transportation, and boosting competitiveness through process improvements, technology adoption, the development of skilled labour, and the creation of new jobs. NLP will assist in making India a hub for logistics.
India’s warehousing stock per capita (sq.m) of – 0.02 is extremely low compared to China’s 0.8, the UK’s 1.9, and the US’s 4.4. The NLP offers warehousing quality rules for the first time. All the stakeholders will benefit from working together on the Unified Logistics Interface Platform (ULIP).
NLP is a game changer to make logistics the growth engine of India.
Swarup Bose, Founder and CEO, Celcius Logistics
The NLP has been a much-awaited reform policy, and I am happy with the challenges that the policy aims to address in various aspects of logistics. Especially with the introduction of the Unified Logistics Interface Platform (ULIP), I think we will be able to create a tech-enabled national platform that can fast-track digitisation in the sector and help drive transparency and operational efficiency through data-driven insights.
Additionally, the GatiShakti initiative, which aims to build a national master plan for multi-modal connectivity, is a great boost for creating a seamless supply chain network. For a cold supply chain marketplace like ours, this would be significant as it provides us with a strong base of transport infrastructure. This will be the key to creating an unbroken cold supply chain network, which is the need of the hour for temperature-controlled food and pharma logistics. The policy also aims to effectively complement the manufacturing, retail, and export sectors, which can accelerate growth in international trade as well, thus putting India on a growth trajectory.
The NLP will also help improve access to remote and difficult terrains via drones, as well as fuel other such innovations, increasing overall efficacy. Also, digital freight networks will grow exponentially due to this policy, ensuring return loads and lower dead miles for transporters.
Lastly, initiatives like the E-Log, standardisation of warehousing, paperless, digital documentation, GatiShakti Vishwa Vidyalay for training and upskilling of drivers and handlers, and the thrust on greener transportation through EVs, etc., are all powerful reforms that will set the pace for building an efficient, cost-effective, and tech-enabled logistics sector for India. As a SaaS-based marketplace ourselves, with a focus on the digitisation of cold supply chains, we are very happy with the government’s efforts in the direction of cutting the logistic costs while making it more robust and effective. This will pave a new path for India, driving it toward becoming a 5 trillion economy. “
Pervinder Singh Chawla, Co-Founder, OnMove by Zast Logisolutions
”The much-awaited NLP is a transformative approach for economic growth and sustainable development. It creates a path for logistics to contribute to the economy and GDP of the country in a positive manner. The policy will streamline the supply chain process with a strong focus on creating a single-window e-logistics market, employment generation, skills development, and making medium and small enterprises competitive. In India, where road transportation accounts for 60per cent of the logistics sector, shifting to multimodal infrastructure that includes rail, shipping, road, and air transport will help reduce traffic congestion while also lowering crude import bills. The policy addresses the pre-existing concerns in India’s logistics sector from a global perspective. The comprehensive areas mentioned in the policy, like process re-engineering, paperless supply chain, seamless multimodal transport, and modern connectivity for ease of doing business and reducing logistics costs, will help the country achieve its economic goals. The sector-specific logistics plan and strengthened cooperative federalism will make India a Global Digital Logistics Hub. Gati Shakti Vishwavidyalaya will act as a human resource for drivers and others. New courses and skill development training programs at UG and PG levels will boost the Indian economy by enhancing the employment rate. The NLP also formalises the logistics sector by introducing a Unified Logistics Interface Platform (ULIP). The Ease of Logistics Services Portal (E-Log) will build a Digital Regulatory Interface. The reduction in transaction costs will catalyze trade while enhancing competitiveness and driving the MSMEs sector through cost-efficient logistics. Overall, the NLP is a holistic approach to help India set a global benchmark and become one of the top 25 logistics performers in the world.”
Zaiba Sarang, Co-founder, iThink Logistics
“NLP aims at reducing the logistics costs from 13per cent to a single digit. Drones will soon contribute to agricultural logistics from the remotest regions of the Himalayas or remote islands. Their products will be made accessible to the metro region of India. ULIP, ELOG, Gati Shakti, and many other initiatives will try to deliver cheetah speed to India’s logistics. NLP gives the smallest person in the ecosystem access to information that was previously available only to key stakeholders. 85 per cent of owners own fewer than 10 trucks, and their empty trucks can pick up the goods from the best place, which will yield them a higher return. NLP also helps the last mile to be more efficient and faster to fill up the gap in transport where businesses can benefit in terms of time and cost. Currently, logistics is providing livelihood to more than 22 million people, with one of the initiatives aimed at upskilling and increasing employment opportunities. At the grassroots level, NLP also helps truck drivers get a peaceful night. Along with the normal people in the ecosystem, it will also help the shramik class to get respect and dignity.”
Piyush Kumar Singh, Trade Specialist – Logistics & SCM | Trade Solutions | Skill Development
The nation’s enormous but dispersed logistics sector is well-served by the eagerly awaited policy framework. Notably, the government’s latest policy comes with a Comprehensive Logistics Action Plan (CLAP) which details the NLP’s specific targets. These include: Reducing India’s logistics cost to be comparable to global benchmarks by 2030 and aiming to be among the top 25 countries by 2030 in the Logistics Performance Index (LPI).
The policy focuses on key areas such as process re-engineering, digitisation, and multi-modal transport. It is a crucial move as high logistics cost impacts the competitiveness of domestic goods in the international market. Being the 5th largest economy in the world, India aims to be among the top 10 in the LPI (Logistics Performance Index) by 2030. As India aims to become a USD 5 trillion economy by 2024-25, connectivity and superior infrastructure will become more critical. The policy’s target is to ensure that logistical issues are minimised, exports grow manifold, and small industries and the people working in them benefit significantly.
The NLP will prove to be a stimulus for the industry’s development and will aid India in establishing benchmarks for going paperless globally. As expenses are reduced and other important stakeholders in the logistics sector have hailed the NLP as a tremendous step forward for the country’s logistics sector, it will enable SMEs and MSMEs to pivot even more in the direction of accelerated growth.
Anil K Mishra, National Logistics Head India (South Asia), Pladis India
NLP is a long-awaited and big milestone for the Indian industry. The National Logistics Policy is an all-encompassing effort to address cost and inefficiency by establishing an overarching interdisciplinary, cross-sectoral, and multi-jurisdictional framework for the developing logistics ecosystem. The policy aims to bring down logistics costs in India to attain global benchmarks by 2030. The National Logistics Policy sets the roadmap for developing a more interconnected and tech-driven framework for building cost and operational efficiency in the sector. To push toward seamless multimodal transportation and modern connectivity will be a game changer as it will shift the transportation stress from just the road to other modes as well. The focal push for digitisation through platforms like ULIP and E-LogS is crucial to support the designed services improvement framework in improving regulatory inter-operability, standardisation of logistic processes, and bringing the entire multimodal network onto a single digital dashboard, enhancing visibility and transparency for all stakeholders.
NLP will help the last mile to be more efficient and faster to fill up the gap left by transport where businesses can benefit in terms of time and cost.